Greater Arab Free Trade Agreement (GAFTA)

Item / GAFTA Agreement
Validity / Pursuant to Decision No. 1317 D 59, the Economic and Social Council,at a meeting held on19/2/1997, adopted the Executive Program and set a timelinefor the establishment of an Arab Free Trade Area in accordance with the 1981 Agreement for Facilitation and Promotion of Trade among Member Countries.
Entry into Force / The Agreement entered into force on1/1/1998.
Duty-Free Products / 1-All trade among Arab member countries was subject to a gradualphase-outfrom 1/1/1998 until 1/1/2005, which was the timeline set for establishing the Arab Free Trade Area.During the liberalization process Member countries were able, as per agreement during the implementation process,to schedule certain commodities for immediate liberalization. The FTA applies to all products as follows:Agricultural and animal products, from Chapters 1 to 24,whether in their raw or processed form.
2-During the liberalization process member countries were able to exclude from tariff reductions certain agricultural products depending on the production season. However, since 1/1/2005 all agricultural products became exempt from customs duties and other fees and charges having similar effect.
3-Industrial products from HS Chapters 25 up to 96.
4-Provisions cited in this Program shall notapplyto products or materials banned from importation, circulation or use in any member country for reasons related to religion, health, security and environment orbecause of quarantine rules. Member countries arerequired to submit a list of these products, as well asa list of any related amendments.
5-These provisions do not apply to commodities produced in free zones where specific procedures are yet to be established in connection with the treatment of such products.
Preferential treatment / Reduction rates reached zero level by 2005.
Current Implementation Position / 1- Seventeen Arab member countrieshave acceded to this Agreement to date:
Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Sudan, Syria, Tunisia,United Arab Emirates and Yemen.
2- Three of the countries in the region have not yet rendered effective the gradual phase-out of customs duties and any other duties or charges having equivalent effect (Palestine, Sudan and Yemen).
-Yemen reduces its import duties by 16% annually starting from 2005 to reach total exemption in 2010.
-Sudan reduces its import duties by 20% annually starting from 2006 to reach full exemption in 2010.
-Palestine is exempted from reducing its import duties, whereas its exports to Arab countries are exempted from any customs duties or other duties having equivalent effect pursuant to the Arab Summit decision inTunisia no.274 in 2004.
3- Reduction rates reached zero level by 2005.
4- All exceptions granted to member countries were terminated by 16/9/2002.
Rules of origin / 1-The Arab rules of origin are being used currently in order to apply the GAFTA agreement. These rules of origin require at least 40% value-added.
2-The detailed Arab rules of origin derived from the EU rules of origin arebeing developed currently. Their objectives are to protect Arab countries’production from substitute products originating in non member countries and to give preferential custom treatment on applicable goods that fulfill the value added criteria.
3-All types of non tariff measures (seasonal restrictions, import licenses, and other quantitative measures) have been eliminated.
  • Dispute settlement mechanism:member countries have established procedures for settling disputes among them.
  • Abolishing the authentication/certification needed for rules of origin documents and certifications.
  • Agreement on services: schedules of concessions under the GATS are now being discussed to reach an agreement on services in accordance with WTO agreement.
  • A detailed schedule for services feesis being prepared to determine whether they include duties with equivalent effect.
  • Free zones products:the provisions of the GAFTA agreement including the customs reduction are not applicable to free zones products.